No Deposit Home Loans
Buying your new home has never been easier!
With the arrival of 'No Deposit Home Loans' it has never been easier to get into the property market or to buy your first home. There are many things you need to consider thought before you apply as 'No Deposit Home Loans' have quite a strict qualifying criteria and the following details must all be considered before you apply.
Deposit
Even though the 'No Deposit Home' is designed for people with no deposit, you will still require to have at least 5-6% of the purchase price set aside to help cover the costs of settlement. This includes costs such as stamp duty and mortgage insurance which make up a large portion of the settlement costs. If you qualify for the 'First Home Owners Grant' you may use this to go towards these costs, but depending on your purchase price you may still require extra funds to help complete settlement.
Employment.
Lenders are very strict when it comes to employment and qualifying for a No Deposit Home Loan. Their rules are basically as follows;
Wage Earners
You must be in your current FULL TIME position a minimum of 6 months with and at least 2 years continuously employed full time. Some lenders require 12 months in the same job and two years in the same industry.
Self Employed
You must be able to show the last two most recent years completed tax returns. The nett profit will be used as you income. They also may ask for accountant prepared interims for the current financial year.
Credit History.
You MUST have a clean credit history to qualify. Any defaults or judgements will not be accepted by 99% of all lenders. One lender however currently allows up to $1000 in defaults as long as they are to a teleco of utility company (Telstra and electricity for example), take note though that this product comes with higher rates and costs.
Location & Postcode Restrictions.
No Deposit Home Loans have strict postcode restrictions attached throughout Australia and you can only buy in approved locations, no ifs or buts. In most circumstances large regional towns and cities are preferred but to be sure you will need to check with your mortgage broker as to which locations are approved.
The lenders mortgage insurers (LMI) are the ones whom dictate the postcode list and it is changing all the time but at this stage it is quite conservative and you really need to make sure your locations is suitable before you apply for your no deposit home loan. If you would like to know more contact the Revive team and we will tell you in just minutes whether your location is suitable. info@revivehomeloans.com.au
Property Types
Once again the LMI dictate the types of properties that can be bought with this loan products. If the property you are considering is not a house, unit or townhouse in a suitable location chances are it will not be approved. Unsuitable properties include:
- Vacant Land
- Rural property.
- Rural Residential property over 5 acres.
- Property with no town water or sewerage.
- Properties must have a sealed road in front.
- Inner city units less than 50sqm.
- Heritage listed properties.
- Properties in disrepair.
If you are unsure as to whether you qualify or if you would like some further information please do not hesitate to contact the friendly team at Revive Home Loans, we will give you all the answers you need obligation free.